Sanlu Q1

Q1
How did the Sanlu milk crisis arise? Who should be deemed responsible for the crisis? Why?

In June, Jiangsu media reported a two-month surge in the number of babies diagnosed with kidney disease. The scandal broke on 16 July after sixteen infants in Gansu Province, who had been fed on milk powder produced by Shijiazhuang-based Group, were diagnosed with kidney.  On 15 September, the company issued a public apology for the contaminated milk powder. In addition, the authorities reportedly seized 2176 tons of milk power in Sanlu’s warehouses. An estimated 9000 tons of product has been recalled. The government Arrest and fire some relevant people as this milk crisis is serious and hurt lot of babies.

There are few reasons of the milk crisis.

• The growing per capita income in China
• Chinese people desire for Western diets
• The increasing dairy consumption and demand for milk and dairy products
• The Infant formula is more popular due to heavy advertising by producers. They convince many young Chinese parents to buy their product because of nutritional value and quality of their products
• The breastfeeding was declining in China
• Wealthier families also often opted to use infant formula to fit their busy lifestyles
• Some unscrupulous producers of infant formula had made and sold low-quality milk products for higher profit and personal gain
• The inter-regional competition in both product sales and milk sources intensified, dairies were pressured to keep their costs low, even at the expense of their product quality, in order to stay competitive.
• The milk center also mix with low-quality soy-protein power to lower production costs which is also illegally tainted with cheap and impure melamine scrap

Who should take responsibility?

Farmer

• An open secret in the dairy industry that adding melamine or other protein-boosting chemicals to milk
• They are greedy to earn more money instead of doing an ethical business
• Little education background àdon't know the impact of melamine
• They have no penalty if they give a poor quality of milk
• They did not sign any contract àdid not have clear guideline or standard of the milk

Supplier

• Provide the toxic materials (Melamine) in the milk powder

Milk collection station

• They keep adding melamine
• Since the raw milk is already polluted by farmer, the content of melamine is more

Sanlu

• Announce the accident to the public lately
• only focus on profit but ignore the quality control

Fonterra

• Since the price is so low compare with other dairy companies, they should question about why the price is so low
• They obtain the milk from different sources which are not registered

The (government)quality control department

• Fail to check the quality of milk content
• Allow the poisonous milk powder enter the market

Shijiazhuang officials

• Refuse to recall the Sanlu milk products
• Decide to inform public only after Beijing Olympics (late report)

Government

• Do not have a tight restriction on protein
• Have limited safety guidelines
• Have the responsibility to educate the customer
• lack of encouragement of breast feeding
• Impropriate on handling complaints (not hiding the complaints)

Retailer

• Should have social responsibility to ensure the safety of product
• Should have refund to customers

Consumer

• Too much concern on high price product
• Should be a smart consumer ( do more research to compare different brand)
• Too much trust on the “inspection free’ label àmistanken

References:
Sanlu PDF
http://www.usnews.com/news/world/articles/2008/10/09/the-story-behind-chinas-tainted-milk-scandal
http://www.theguardian.com/world/2008/sep/12/china